Affordable Healthcare Act - Assignment Example

AFFORDABLE HEALTHCARE ACT Affordable Healthcare Act Introduction “The Patient Protection and Affordable Care Act” that is informally known as the Affordable Healthcare Act was signed by Obama (President) on 23rd March, 2010. Together with the Healthcare and Education Reconciliation Act amendment, the Affordable Healthcare Act represents the most crucial regulatory overhaul of the United States healthcare system since the passage of the Medicare and Medicaid in 1965. The Act is a long, multifaceted piece of the legislation that tries to reform the American healthcare system by provision of Affordable Quality Health Insurance and by reducing the growth in the healthcare spending in the United States (Sommers, & KronicK, 2012). The reforms are; new benefits, protection and rights, rules for the Insurance Companies, the taxes, the tax breaks, spending, funding, creation of committees, education and among others. The Establishment Process The idea Affordable Healthcare Act (ACA) came just a month after the inauguration of Obama (February 2009). During this time, the president addressed a joint assembly of the United States Congress, imploring the Congress that time was right for the overhauling of the health care. On September 9, Obama went yet another joint session of the Congress to outline the reform measures in regard to the Act. The version of the health care bill was passed on November 7 by the House of the Representative by a slim margin of 220-2015. Later on the Senate proceeded with its debate on the health care that was projected to be passed before the Christmas. Though it went through many hurdles, on December 24, all the Democrats united and the Senate passed its version of the legislation. On March 23, 2010 President Obama signed the Act. The Supreme Court on June 28, 2012 rendered the final decision to uphold the health care law. Funding According to the Congressional Budget Office (CBO), the Affordable HealthCare Act’s coverage expansion is approximated to cost $1.363 billion for the periods 2014-2023 in the mandatory expenditures (Gruber, 2011). The ACA and its companion reconciliation legislation contains a number of the provisions that are designed to raise the revenue to offset the cost of the health reform law. Apart from the individual mandatory tax/penalty, the ACA is partly funded by the increased taxes on the other non-health and health related items and services. Additionally, there are numerous new increased taxes and the fees that are meant to fund the Act. Some of the sources for the Act include; 0.9% increase in the Medicare Tax Rate, 3.8% new tax on the unearned income of the high-income taxpayers, New Annual Fee on the health insurance providers, 40% New Tax on the health insurance policies that exceeds $10,200 per person or $27,500 for the family per annum, New Annual Fee the importers and manufacturers of the branded drugs, 2.3% New tax on the importers and manufacturers of some medical devices, +2.5% increase from 7.5% to 10% in the Adjusted Gross Income on the medical expenses deduction, the limiting of the annual contributions to $2,500 on the flexible spending arrangements in the cafeteria plans, other revenue sources amounting to $14.9 billion, 10% imposition on every individual with whom “indoor tanning services’ are performed, 3.8% New Tax on the investment income (Protection, & Act, 2010). This includes; the gross income from the interest, royalties, dividends, net capital gains and rents. However, the investment income does is not inclusive of the following; interest on the tax-exempt bonds, the veteran’s benefits, the excluded gain from the sale of the principle residence, and among others. Public Opinion about the Affordable HealthCare Act Many surveys were conducted before the passage of the bill and after the enactment of the Act in order to gauge the public opinion’s reaction to the ACA. In the early 2010, the public opinion in regard to the ACA was fairly evenly divided. For instance, according to the research by the Kaiser Family Foundation (KFF) on April, 2010, 46% of the Americans had a favorable opinion of the bill, and about 40% had unfavorable opinion (Kaiser Family Foundation, 2010). However, as the stakeholders and governments continued to roll out the ACA, the public opinion in conjunction with the Act changed based on what they learned about the new law and what they experienced. However, five years after the passage by the Congress, the attitudes about the ACA law remains largely unchanged. Many voters before the enactment of the Act believe that it will lead to the increased health care costs and hurt the quality of the health care. Though the Affordable Healthcare Act was applauded by large number of the older adults, most of the young adults were against it. This is due to the following; first, most of the young adults are in the healthy majority. The adults that are aged between18-35 and without the health problems are called the “young invincible” for a reason. According to Centers for Disease Control report, less than a quarter of the adults that are aged between 18 and 29 are said to have visited the emergency room during 1 year period and only 7% spent a night in the hospital (Kaiser Family Foundation, 2010). Therefore, the majority of the young adults felt that there was no need for the Affordable Healthcare Act because they are not prone to the diseases. Secondly, prior to the passage of the ACA, the older and the unhealthy adults could be charged more than five times compared to what the young adults could be charged for the insurance premiums. To those that are prone to illness (older adults), its good news because they will be able to get affordable insurance premiums that cover their health problems. However, the young adults are unflavored. This explains why the majority of the young adults were against the ACA. Other reasons for the majority of the young adults rejecting the ACA include; emergencies don not always cost less with the insurance, and that for the young adults, being uninsured is five times cheaper than being insured. Though the young adults were opposed to the ACA, according to the research that was done the period September 2010 to June 2011, the proportion of the young adults with the insurance increased proportionately from 64.4% to 72.7% representing an increase of 8.3% or 2.5 million. This is because the young adults were able to gain health insurance coverage in the late 2010 as opposed to the early 2010 when they were against the ACA. Despite the Americans’ mostly negative opinion/views in regard to the ACA, a good number of the older adults supported some of the specific elements of the act. A March CBS New York Times Poll revealed that 85% of the adults favored the requirement that the insurance companies cover the people (adults) with the pre-existing conditions. Even though some of the older adults were opposed to the bill before its enactment, there is some evidence that most of these people lacked the proper understanding of the ACA. Since most of the older adults are easily prone to the diseases, the majority of them therefore believed that the enactment of the ACA will play a critical role in the reduction of the medical costs. Therefore, the majority of the older adults were in support of the act due to the reduction of the medical expenses. Advantages of Affordable HealthCare Act One of the key merits of the ACA is that it makes the health care services accessible and affordable to majority of Americans. The fact that the act requires all of the health insurance plans to cover at least ten essential health benefits and rights favors millions of the patients and uninsured through offering of free or low healthcare costs. Accordingly, this allows the parents to cover their children up to the age of twenty-six, which on the other side provides more profits to the insurance companies. Another advantage of the Act is that the insurance companies will no longer deny anyone the right to coverage for the pre-existing conditions, or raise the insurance premiums once they get sick. Other advantages of the act include; lifetime and the annual limits on the insurance coverage are eliminated, the parents will be able to add their children up to the age of 26 years on their insurance plans, it leads to the provision of the tax credits for the insurance to the people in the middle class (below the 400% of the poverty level), it leads to the expansion of the Medicaid to 138% of the Federal poverty level hence providing coverage to the adults without the children for the first time; obligates businesses with more than 50 workers to provide health covers but with tax credits to help them with the costs, and lastly it has helped lower the deficit in budget by $143 billion over the next 10 years. Disadvantages of ACA The ACA led to the cancelation of about 30.1 million people that were buying their private health insurance. This led to high costs of replacement because it provides the services like the maternity care that, in fact, most of them do not need. Secondly, the pharmaceutical companies will be required to pay an extra $84.8 billion in fees over the next 10 years so as to pay for closing the so-called “donut hole” in the Medicare Part D. This could lead to the increased drug costs in the event that they pass this to the customers. Thirdly, as from 2013, the families have been allowed to deduct only the medical expenses that exceed 10% of the income. Fourthly, the ACA is an incomparable competitor in the insurance market because it aims at providing high-quality health care at very low costs. Fifty, the ACA will discourage the majority of the low-income taxpayers from attempting to increase their households’ incomes. Additionally, the fact that the Act covers the sick people, it tends to increase everyone’s cost of the insurance. Lastly, the negativity of the Act affects even those that may not be willing to purchase the insurance through the Obamacare tax penalties. In view of the pros and cons of the Act, in a comprehensive logic, the Act is a sustainable solution for the improvement and provision of affordable and quality healthcare especially for the low income earners, the younger generations and the society at large. Effectiveness of the ACA At the most basic level, the ACA was meant to reduce the number of the Americans without the health insurance. If measured against this objective, the Act has made tremendous progress. The perfect measurement of the number of the people that are affected by the health care law is stiff difficult, however, a series of the government reports and private sector arrive at the same basic estimates the number of the Americans without the health insurance has been reduced by approximately 25% by 2014. Additionally, in total it appears that about more than half of the American people who have been newly insured signed up for the Medicaid, more especially in the states that decided to broaden the eligibility for the program to the low-income residents. Approximately four million Americans are caught in the policy gap especially in those states that have not yet expanded the Medicaid. Some are difficult to reach due to mental illness, the language barriers or the other isolating factors. However, the dire warnings that the Act would lead to the increased premiums for most of the people remains unfounded. In fact, the law has spurred competition leading to the new companies entering the market. According to the research by McKinsey it found out that in 43 states that have released the information, there has been recorded 22% increase in the number of the insurers for 2015 (Israel et al., 2015). The majority of the new insurers are in the markets especially where the competition has already been flourishing. Analysts predict that in the short-term, the health law can lead to the increased healthcare spending. The recent measures in 2014 shows an uptick in the use of the health care services, the expected effects of the expansion of the health insurance coverage to the millions of the Americans that did not have it before. Despite of this, the real long-term test of the law will be based on whether, once the new people are absorbed into the system, the present downward trend in the spending growth can be able to be sustained. Public Opinion after ACA Enactment The public opinion on the passage of the ACA at the five year anniversary still shows that the public is divided but have greatly narrowed. The Kaiser Family Foundation on their monthly tracking polls shows that the gap between the unfavorable and favorable opinions of the health care law has narrowed to the closest margin in the over two years after its passage. 43% of the respondents said that they had an unfavorable view and the 41% said that they have a favorable one. In the month of March, 2015 the gap in the opinion narrowed greatly among the Democrats, Republicans, and independents. However, regardless of this, the partisan division in the opinion of the health care law remains. Overall, 60% of the Americans think that more people have forgotten the health coverage through Obamacare. 74% of the Democrats concur that the ACA has increased the health coverage compared with only 49% of the Republicans (Donovan, 2015). Two months after the deadline for signing up for the health insurance plan, the millions of the Americans have varied opinions about the effect of the new law. In a poll that was conducted by Bankrate, it revealed that 43% of the citizens believe that the ACA has a negative impact on the US, while 28% think that the ACA has positive impact on the US. While more than 20% believe that the ACA has little impact on the US. However, as the deadline for the signing up of the law approached, the numbers have been shifting slightly. For instance, between May 16 and 19, 2014, 53% stated that the changes were necessary to the law, 35% believed that the law needed to be repealed and 6% opined that no changes should be made to the law. Generally, when comparing the Act before and after its enactment, the majority of the people that were opposed to the law are now supporting it. For instance, the young adults recorded an increase of 2.5 million subscription to the health insurance (Margot, 2014). The reason for a large number of the people turning to the law can be attributed to the understanding of the law as opposed to rumors that they were basing their arguments before. Future of the Policy The ACA is the transformative piece of the legislation that if it’s fully implemented will reshape the United States’ health care system for a long time. Therefore, it’s hard accurately to predict the future impacts of the policy. However, the future success of the law will depend on how the law will go in slowing the cost of growth. In this respect, there is great uncertainty because the control of the cost of growth in the healthcare has been filled with uncertainties. Additionally, the future of the policy is also dependent on how the public has perfect understanding of the elements of the law. This might cause the increase of the proportion of the Americans who favor the law to increase tremendously. Therefore, if the education efforts were to help in the correction of the public misunderstanding of the law, the public evaluations of the law might increase considerably favorably (Kocher, Emanuel, & DeParle, 2010). Conclusion It is evident from the analysis of the ACA, the Act has both its positive and negative sides, which has become a limitation to its full support from the public. However, with the changing public opinion concerning the Act, it is undoubtable that the Act in the future can receive fully support if it is reliability in reducing the public spending on health care is achieved or is foreseeable in the long-run. Moreover, given the Act has enabled majority of Americans obtain health coverage, as shown by the statistics above, it is undeniable the Acts future can be certain, even though, it faces a couple of challenges at the moment. References Donovan, D. (2015). medical students’knowledge and opinions of the affordable care act and other health care policy issues (doctoral dissertation, The University of Arizona.). Gruber, J. (2011). The Impacts of the Affordable Care Act: How Reasonable Are the Projections? (No. w17168). National Bureau of Economic Research. Gruber, Jonathan, (2010). “The Cost Implications of Health Care Reform.” New England Journal of Medicine362 (22), 2050–2051. Israel, J. S., Chen, J. T., Rao, V. K., & Poore, S. O. (2015). Plastic Surgeons Perceptions of the Affordable Care Act: Results of a National Survey. Plastic and Reconstructive Surgery–Global Open. Kaiser Family Foundation, 2010. “Employer Health Benefits: 2010.” Kaiser Family Foundation, Menlo Park, CA,http://ehbs.kff.org/pdf/2010/8085.pdf. Kocher, R., Emanuel, E. J., & DeParle, N. A. M. (2010). The Affordable Care Act and the future of clinical medicine: the opportunities and challenges. Annals of internal medicine, 153(8), 536-539. Margot Sanger-Katz, (2014).”Is the Affordable Care Act Working?” New York Times. Retrieved from: http://www.nytimes.com/interactive/2014/10/27/us/is-the-affordable-care-act-working.html#/ Protection, P., & Act, A. C. (2010). Patient protection and affordable care act. Public Law, 111-148. Sommers, B. D., & Kronick, R. (2012). The Affordable Care Act and insurance coverage for young adults. Jama, 307(9), 913-914. Read More